Not everyone earns income in a regular paycheck. Retirees, investors, and people with large savings may have strong finances but little reportable monthly income. Asset-based programs, often called asset depletion or asset utilization loans, were designed for them.
How it works
The lender takes your eligible liquid assets, subtracts any funds you are using for the down payment and closing costs, and divides the remainder over a set number of months defined by the program. The result is treated as monthly income for qualification. You do not have to spend the assets.
Assets that may count
- Checking and savings accounts
- Brokerage and investment accounts
- Certain retirement accounts, depending on the program
- Other liquid assets the lender can verify
Who it can help
- Retirees living on savings and investments
- Investors with irregular or lumpy income
- Entrepreneurs who recently sold a business
- High-net-worth households with low taxable income
Things to keep in mind
- Guidelines, calculation methods, and eligible accounts vary by lender
- Assets usually need to be seasoned, meaning they have been in your account for a period of time
- Pricing and down payment requirements can differ from conventional loans
- Asset-based income can sometimes be combined with other income sources
A real alternative to “no income”
Traditional underwriting can overlook borrowers who are financially strong but do not fit a paycheck model. If that sounds like you, an asset-based program may open a door that a standard application closes.
Talk With Paul
Every file is different. A short conversation is usually enough to know which program fits and what it will take to close. Start your secure application or call Paul Healey at (949) 606-4117.
This article is for general information only and is not a commitment to lend. Programs, rates, terms, and approvals vary and are subject to borrower qualification, property approval, and lender guidelines, and may change without notice. Not all applicants will qualify. Paul Healey, NMLS #328365 | Spectrum One Mortgage, Company NMLS #332549. Verify licensing at NMLS Consumer Access. Equal Housing Lender.
